China unveils smallest defence budget hike in year

The figure breaks a string of double-digit increases going back many years that has caused worry among China´s neighbours and the US.

BEIJING, March 4, 2010 (AFP) - China on Thursday announced its smallest defence budget increase in years amid national belt-tightening, and vowed that its rapid military modernisation posed no threat to other countries.

The proposed military budget for 2010 is 532.1 billion yuan (77.9 billion dollars), up 7.5 percent from actual defence spending in 2009, a government spokesman said.

The figure breaks a string of double-digit increases going back many years that has caused worry among China's neighbours and the United States over the intent of an effort to rapidly upgrade its once-backward armed forces.

"China is committed to peace," Li Zhaoxing, spokesman for the National People's Congress (NPC), said in unveiling a figure he called "reasonable."

"The sole purpose of China's military strength is to protect China's sovereignty and territorial integrity," he told a news conference.

Experts on China's military said the slower rate of increase was most likely aimed at heading off any possible domestic criticism of the military enjoying continued big budget hikes at a time of relatively slow economic growth.

"At least from a symbolic level the message is that in tough economic times, the military has to tighten its belt too," said Tai Ming Cheung, a researcher at the University of California Institute on Global Conflict and Cooperation.

Li alluded to this, saying China has kept spending under control by "balancing national defence construction with economic development."

The budget will be submitted to the NPC, China's rubber-stamp parliament, which opens its annual session on Friday and typically approves such items by an overwhelming margin.

Li, a former foreign minister, said the bulk of the spending increase was to improve conditions for China's 2.3 million service personnel and for the military's modernisation.

It would help China "face multi-faceted military threats (and) improve capabilities for diverse military tasks," he said, without elaborating.

He stressed the figure amounted to only about 1.4 percent of China's gross domestic product, compared with what he said was four percent for the United States and more than two percent for Britain, France and Russia.

It was not immediately clear when China last announced such a low rate of increase due to the lack of transparency in official statistics.

However, it was the slowest in at least a decade, and less than half of the 15.9 percent average rate of increase from 1999-2008, according to figures reported last year by state media.

The 2009 increase was announced at 14.9 percent.

However, the figure is widely viewed as under-representing actual spending, with some key military programmes kept off the official books. Cheung said actual spending was probably two to three times the official budget.

A Beijing-based Western expert on Chinese defence issues who asked not to be named said the budget "is certainly not as big as the military brass would have liked in order to pursue their modernisation efforts."

He said it would cause various forces in the military to jockey for funds.

Cheung said the budget could also be a symbolic gesture to Taiwan.

"There has been an improvement in cross-strait relations and a reduction in security tensions so they may offer this as a token olive branch," he said.

China has claimed the self-ruled island since they split at the end of a civil war six decades ago and does not rule out using force to reclaim it.

But ties have warmed dramatically since the 2008 election of the more China-friendly Taiwan President Ma Ying-jeou.

Tensions have however emerged between China and the United States after Washington approved the sale of 6.4 billion dollars in weapons to Taipei.

In retaliation, China said in January it was cutting off military contacts with the United States and could sanction the US firms involved in the deal.

During National Day celebrations last October, China put its modernisation on display by parading a range of sophisticated homegrown weapons including missiles, fighter jets, high-tech radar and other support systems.